Mortgage repayments are more expensive than ever: Find out by how much with our tool | Personal Finance | Finance

The mortgage costs shown on the map represent the amount you would pay per month – crucial for household budgeting – assuming:

• The property was purchased at the average rate in the area;

• The average mortgage rate offered at the time by lenders was secured;

• You are able to put forward the deposit amount entered.

The costs shown apply to the initial fixed-rate period of the mortgage, which is set to five years by default.

The calculator uses three key variables to determine how much you would end up forking out to the bank.

READ MORE: Millions of Britons face ‘remortgage nightmare’

Location

In December 2021, the average monthly cost of a mortgage on a house in the UK was £822. By December 2022, this figure was 59.4 percent higher at £1,311.

The same astronomical rise was not, however, experienced equally in all regions. The biggest increase of all occurred in the North West (63.4 percent), followed by the North East (63.1 percent) and the East Midlands (62.9 percent).

Despite these price shocks, the underlying picture of the cost of mortgages remains more or less the same – with payments considerably higher in southern England.

Average monthly prices were the highest of all in London, at £3,156 at the end of last year, followed by the South East (£1,909) and the East (£1,613). Repayments were cheapest in Northern Ireland (£758), the North East (£759) and Scotland (£913).

House prices

The number one reason average mortgage costs vary across the UK is because of widely differing house prices.

Access to good education, transport links, air quality, urban centre vibrancy, and proximity to the coast or national parks all have a hand in determining the demand for homes in an area. Increased demand leads to increased sales prices.

Yet high demand overall also drove up prices countrywide last year – the average house fetching a record £296,000 in October, £33,000 more than the same month a year previously.

According to the ONS’s House Price Index (HPI), the value of a typical sale rose by 9.8 percent over the course of 2022.

Interest rates 

All mortgages in the UK are equally impacted by the interest rate decisions taken by the BoE’s Monetary Policy Committee.

On February 2, BoE Governor Andrew Bailey hiked the base rate by a further 0.5 percent up to four percent – the tenth consecutive rise leaving the cost of borrowing at its highest in almost 15 years.

The BoE and Treasury alike have made it clear that reducing inflation to beneath the two percent target threshold is the prime goal. Making money more expensive reduces consumer spending and upward pressure on prices in turn.

Despite fears, Mr Bailey will increase the rate yet again on March 23, the Office for Budget Responsibility forecasted inflation to fall to 2.9 percent by the fourth quarter this year, thanks to the provisions of Jeremy Hunt’s budget. Interest rates should, in this case, soon stabilise.